Two Oakland City Council members want to slash by half the fees the city charges for taxi medallions, which they say are too costly for cabdrivers dealing with rising costs.

Larry Reid and Ignacio De La Fuente are proposing to reduce the medallion fee from $1,019 a year to $510. The councilmen, whose proposal will be heard by the council Tuesday night, say the economic climate warrants the 50 percent reduction.

But while the councilmen say they are trying to help drivers, medallions are actually owned - and paid for - by cab companies, which in turn charge drivers to use the cabs. The cab companies decide how much they charge drivers, regardless of how much they pay the city for the medallions.

So when cabdrivers heard of the proposal, some wondered how it would help them. "It doesn't affect me," said Alex Lopez, who has been driving a cab in Oakland for five years. "It's for the owners."

Oakland International Airport, the most profitable destination and pickup point for cabdrivers, has seen passengers decline from a high of 13.5 million a year to less than 10 million, De La Fuente and Reid said.

De La Fuente said the city has been reducing rents and leases for all sorts of industries over the past year. Over the past few weeks, the city has reduced rents at a city-run golf course, and a council committee proposed to reduce rents on city-owned buildings at Frank Ogawa Plaza.

"We've got to look at all the industries, not just one," said De La Fuente, who is concluding a 20-year run on the City Council after failing in his election bid to oust Councilwoman Rebecca Kaplan from her at-large seat. "What's the difference between this and the metropolitan golf course ... and reducing the rents in Frank Ogawa Plaza?"

Owners lease cabs

Typically, medallion owners lease out cabs to drivers for around $500 a week.

Among the many medallion holders who would benefit from the lowered fees are companies, including Friendly Cab, owned by one politically powerful couple - Baljit and Surinder Singh - and one of their relatives, according to city records and Arturo Sanchez, the deputy city administrator. Sanchez said the Singh family and their businesses control more than half of the city's 315 medallions.

Their companies pay the current $1,019 medallion fee for 133 taxis, according to Sanchez. For another 41 taxi medallions they control, they pay $25 a car - due to issues resulting from an ongoing legal dispute between various private parties, according to Sanchez.That means they pay nearly $137,000 in medallion fees per year.

But they charge at least $500 a week to cabdrivers for the right to use their cars - an amount totaling $4.5 million annually, Sanchez said.

Veterans Cab, a separate company not affiliated with the Singhs, pays $46,000 in medallion fees - but takes in over $1 million leasing its cabs to drivers, a charge known as "gate fees," Sanchez said.

De La Fuente and Reid said their decision had nothing to do with the Singhs, who have donated to both of their campaigns - and those of other politicians.

The move, said Reid, "is right for the industry as a whole ... and not based on the fact that the Singh family controls the majority of medallions in the city."

Those answering calls at Friendly Cab and Veterans Cab declined to comment and said their owners were unavailable.

City official opposed

Sanchez opposes the fee reduction because he says the $1,019 fee is what it costs for the city to oversee the cab industry. Plus, he considers it a bargain for what medallion owners get out of the deal.

"That $1,000 that they pay us annually on a license fee is a small fraction of the income they earn per medallion," said Sanchez. "In these financial times, I cannot as staff recommend the city subsidizing oversight of the program."

Sanchez said the city does not regulate gate fees.

The city's lax enforcement of unpermitted cabs, the lack of taxi stands and high gas prices have also put the squeeze on their incomes, cabdrivers said.

But the biggest factor, said Sebsibe Baraki, who has been driving for four years in Oakland, is that "the gate fees are too high."